Unemployment is low only because 'involuntary' part-time work is high

But "involuntary" part-time work is at least 40% higher
in both countries than it was 10 years ago.

The structure of the labour market has fundamentally
changed, and what we used to think of as "unemployment" has
been replaced by mass part-time work, much of it
unwanted.

"Gig economy" jobs are to blame, according to Rob Valletta of
the San Francisco Fed.

Britain just notched up yet another record-breaking low for
unemployment, according to the government. Unemployment stayed at
just 4%, while the number of people with jobs rose to 32.54
million, or 75.8%, "the highest since comparable estimates began
in 1971,"
according to the UK's Office for National Statistics.

But once again, the monthly jobs tally eclipsed how that miracle
was achieved. "Headline" unemployment is only at a record low
because of a 42% increase in the number of people who are in
"involuntary" part-time work.

Since 2006, the number of people in "involuntary" part-time work has risen from 620,000 to 881,000 today — an increase of 42%.ONS

"Involuntary" means they're only working part-time because they
cannot get a full-time job.

In March 2006, at the peak of the economic boom that preceded the
great financial crisis, involuntary part-time work was at a low
of 620,000. It rose to a peak after the 2008 crisis. But today,
after 10 years of economic growth, it has settled back to 881,000
- an increase of 42% over the period,
according to the ONS.

This is not good news.

Four percent unemployment is technically "full employment."
Anyone who wants a job should be able to get one. But 881,000
workers need full-time jobs - the kind that get people out of
poverty - and those jobs are not available.

The average part-time employee in Britain works for about 16
hours a week, less than half the 40 hours that are generally
considered to constitute "full-time" work, according to the ONS.

So, if "involuntary" part-timers were reclassified as
"unemployed" - on the logic that they are unemployed for a
majority of their week - then the UK unemployment rate would be
7%, based on a back-of-the-envelope calculation using numbers
provided by the ONS. The total number of "unemployed" people
would be 2.2 million, not 1.4 million.

Involuntary part-time work is probably 40% higher than "normal"
in the US.

"During early 2018, involuntary part-time work was running nearly
a percentage point higher than its level the last time the
unemployment rate was 4.1%, in August 2000,"
according to Rob Valletta, a vice president in the Economic
Research Department of the Federal Reserve Bank of San Francisco.
"This represents about 1.4 million additional individuals who are
stuck in part-time jobs. These numbers imply that the level of
IPT work is about 40% higher than would normally be expected at
this point in the economic expansion."

These charts show how part-time work has ramped up in the UK over
the last decade.

25% of all British workers are currently only working part-time.

Eurostat / ONS

Part-time work has increased, as a portion of all work, since
2006. The trend was uninterrupted by either the 2008 crisis or
the economic boom that followed. Over the period, part-time work
went up 16% to 8.4 million people.

ONS

14.6% of all UK workers are doing "involuntary" part-time work.

ONS / Eurostat

Business Insider has suggested previously that
the part-time "gig economy" has broken a fundamental link in
capitalism that was good for workers. Pay rates no longer
move upward as unemployment moves downward because companies like
Uber, Amazon, Just Eat, and Deliveroo switch their demand for
labour on and off, on a minute-by-minute basis. Self-employed
folks making a living on Etsy, Airbnb, or eBay know their clients
instantly go elsewhere if they raise their prices by even a few
pennies.

Having a job is no longer a guaranteed way of getting ahead.
Instead, work may keep you poor. You cannot get rich working for
Uber. You cannot get rich working for Deliveroo.